International Steel Mills

Tata Steel and Thyssenkrupp in Talks on European Venture
Written by Sandy Williams
April 2, 2016
Tata Steel’s exit from the United Kingdom may be a precursor to a merger with Thyssenkrupp. Wall Street Journal reports Tata and Thyssenkrupp have been in high-level talks for more than a year about combining their European steel operations.
Whether the two companies are considering a buyout or forming a joint venture is unclear at this point. With the UK business out of the way, Tata’s major European asset would be the profitable Ijmuiden Works in the Netherlands. The steel plant has an annual crude steel production capacity of 7 million tonnes that is mainly used in automotive, construction and packaging applications.
“Given Thyssen’s interest in pursuing consolidation solely with another premium flat-steel producer, we believe this cleaning up of Tata’s portfolio may help free up the core Dutch assets for Thyssenkrupp,” said analysts at Jeffries.
Credit Suisse analysts agreed, noting Tata Steel’s exit from the UK would make a Thyssenkrupp deal more attractive. “This scenario, in turn, could lead to the creation of a 20 million tons high-quality steel producer in Europe and the eventual exit of steel for Thyssenkrupp, with arguably a strong synergy story,” said analysts at Credit Suisse as quoted by WSJ.
Tata Steel’s Dutch plant is about 124 milles from Thyssenkrupp’s Duisburg steel plant and in a good position logistically for Thyssenkrupp. Combining the 7 million tonnes of capacity at Ijmuiden Works with Thyssenkrupp’s 15 million tonnes at its Steel Europe division would make it a strong competitor to steel giant ArcelorMittal.
Sandy Williams
Read more from Sandy WilliamsLatest in International Steel Mills
CRU: JSW Steel powers to four-fold profit rise
India's JSW Steel reported a 307% year-on-year (y/y) jump in net profit to INR16.5 bn ($188 million, €161 million) in fiscal Q2.
SSAB cites US strength but flags tariff-driven uncertainty
The Americas segment of Swedish steelmaker SSAB delivered a stable third quarter, but with weaker shipments and continuing cautious demand. Plate prices held, but tariffs, slowing end-user demand, and...
CRU: Bids made for Ilva assets
The Italian government has received 10 offers for the former Ilva integrated steel works at Taranto, but only two bidders are interested in purchasing all of the company’s assets.
Global steel production declined through August
August marked the second-lowest monthly production rate this year, down 13% from the two-year high of 166.6 million mt in March.
Algoma Steel assesses viability of US sales in wake of 50% S232 tariffs
Canadian flat-rolled steelmaker Algoma Steel is reconsidering its presence in the US market after the doubling of US Section 232 tariffs on imported steel to 50%, a company spokeswoman said.
